Order 2013-5-13

Served: May 21, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 21st of May, 2013

Essential Air Service at

PADUCAH, KENTUCKY

HANCOCK/HOUGHTON, MICHIGAN

MUSKEGON, MICHIGAN

PELLSTON, MICHIGAN

SAULT STE. MARIE, MICHIGAN

WATERTOWN, NEW YORK

EAU CLARIE, WISCONSIN

Under 49 U.S.C. 41731 et seq. 

DOCKET DOT-OST-2009-0299

DOCKET DOT-OST-2009-0302

DOCKET DOT-OST-2009-0301

DOCKET DOT-OST-2011-0133

DOCKET DOT-OST-2009-0303

DOCKET DOT-OST-1997-2842

DOCKET DOT-OST-2009-0306

ORDER REQUESTING PROPOSALS

Summary

By this Order, the Department is requesting proposals by June 26, 2013, from carriers 

interested in providing Essential Air Service (EAS) at Paducah, Kentucky; Hancock/Houghton, 

Muskegon, Pellston, and Sault Ste. Marie, Michigan, Watertown, New York, and/or Eau Claire,

Wisconsin, for a period of two or more years, with or without subsidy. 

Background

By a series of Orders the Department selected carriers to provide EAS at the above 

communities at various subsidy rate levels. All of the service at these communities is

currently provided with regional jets on a nonstop basis.

Selection Weekly

Community Carrier Hub Order Round Trips Rate Expires

Paducah, KY SkyWest ORD 2012-2-2 14 $1,710,775 12/31/2013

Hancock/Houghton, MI SkyWest ORD 2012-2-2 14 $934,156 12/31/2013

Eau Claire, WI SkyWest ORD 2012-2-2 14 $1,733,576 12/31/2013

Muskegon, MI SkyWest ORD 2012-2-11 14 $1,576,067 12/31/2013

Sault Ste.Marie, MI Delta DTW 2012-4-10 13 $1,676,136 1/31/2014

Watertown, NY Am. Eagle ORD 2011-3-34 12 $3,047,972 11/30/2013

Pellston, MI Delta DTW 2012-4-10 14 peak/ $1,055,322 10/31/2013

12 off-peak
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Request for Proposals

As the end of the current rate terms approach, we are requesting proposals from carriers 

interested in providing service at any or all of these communities, with or without 

subsidy, for the period beginning when the various subsidy rates expire. Carriers should 

file their proposals by June 26, 2013. Staff will then docket the proposals, thereby 

making them public. Shortly afterwards, we will provide a summary of the proposals to 

each community and ask them to submit their final comments. We will give full 

consideration to all proposals filed in a timely manner.1 Interested carriers should 

prepare their proposals with every expectation that their initial proposals will also be their 

final and only proposals. We retain the discretion to negotiate proposals with carriers 

when we deem it desirable. We also retain the discretion to reject outright all 

unreasonable or unrealistic proposals and, if necessary, solicit a new round of proposals. 

However, we anticipate that negotiation or rejection will remain only occasional 

exceptions to the rule.

We are here providing interested carriers with some basic information to serve as 

guidance when they prepare their proposals, but we will not prescribe a precise format for 

their proposals. We expect proposals to adequately describe the service being proposed 

and the annual amount of subsidy being requested. The applicants can make their own 

judgments as to the level of detail they wish to present; however, they might want to 

include proposed schedules as well as supporting data for their subsidy requests, such as 

projected block hours, revenues, and expenses. We strongly encourage clear, welldocumented proposals that will facilitate their evaluation by the affected communities

and the Department. We anticipate applying our usual carrier-selection criteria and the 

general provisions governing subsidy payments for EAS.2 

As always, we will formally solicit the communities’ views on any service options we 

receive before making a long-term, carrier-selection decision. The communities and air 

carriers are encouraged to work together in advance of the due date for proposals to craft 

a service pattern that is both desirable to the community and meets the operational needs 

of the airlines, as carriers cannot amend their proposal after the due date. 

We encourage proposals that meet the communities’ requirements in an efficient manner. 

All of these communities are strong traffic generators and so we will request the 

maximum service level at each community – 67 seats per day in each direction and a 

 1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to 

provide Essential Air Service without subsidy and we determine that service can be reliably provided 

without such compensation, we typically do not proceed with the carrier-selection case. Instead, we simply 

rely on that carrier’s subsidy-free service as proposed.

2 In selecting a carrier to provide subsidized EAS, 49 U.S.C. § 41733(c) (1) directs us to consider five

factors: (1) service reliability; (2) contractual and marketing arrangements with a larger carrier at the hub; 

(3) interline arrangements with a larger carrier at the hub; (4) community views; and (5) whether the carrier 

has included a plan in its proposal to market the service. In addition, The Consolidated Appropriations Act, 

2008, Public Law 110-161, provides that when selecting a carrier to provide EAS, the Department may 

consider the relative subsidy requirements, thus codifying a factor that we have considered since the 

inception of the program. Interested carriers should also be aware that our general provisions governing 

EAS will be included in the selection Order as part of our authorization of subsidy for the selected service. 

Appendix C of this Order contains those general provisions.
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minimum of two round trips per day.3 Carriers are also welcome to propose more than 

one service option, if they choose; they need not limit themselves to a single specific 

service pattern if they envision other, potentially more attractive service possibilities –

different hubs, or longer terms for the contracted service – with subsidy requirements that 

remain competitive.

Filing Format

Carrier proposals should be submitted to the Department with all materials merged into a 

single document. In addition, because the document will be published on 

Regulations.gov, each page should be formatted to be viewed online.

Historical Traffic

In order to assist carriers in making their traffic and revenue projections, we have 

included historical traffic for the communities in Appendix B for the most recent annual 

periods. 

Other Carrier Requirements

The Department is responsible for implementing various Federal statutes governing lobbying 

activities, drug-free workplaces, and nondiscrimination.4 Consequently, all carriers receiving 

Federal subsidy to support EAS must certify that they are in compliance with Department 

regulations regarding drug-free workplaces and nondiscrimination, and those carriers whose 

subsidies exceed $100,000 over the life of the rate term must also certify that they are in 

compliance with the regulations governing lobbying activities. Because the Department is 

prohibited from paying subsidy to carriers that do not submit these documents, the selected 

carrier will be required to submit them in order to receive subsidy. Interested carriers 

requiring more detailed information regarding these requirements, as well as copies of the 

certifications, should contact the Office of Aviation Analysis at (202) 366-5903. The 

Department is prohibited from paying subsidy to carriers that do not submit these documents.

Community Comments

Civic officials and the States are welcome to submit comments on the proposals at any time. 

As noted earlier, we will provide a summary of the proposals to the civic parties and ask 

them to submit their final comments shortly after June 26, the due date for carrier proposals.

This Order is issued under authority delegated in 49 CFR Part 1.25 a(b) and re-delegated 

to the Director, Office of Aviation Analysis.

 3 This works out to two round trips per day with regional jets, three round trips per day (18 a week) with 

30-seat aircraft, and four round trips per day (24 a week) with 19-seat aircraft.

4 The certifications are available on the web at

http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/essential-air-service
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ACCORDINGLY,

1. The Department requests proposals from carriers interested in providing EAS at any or 

all of these communities. Carriers should submit their proposals, with subsidy if necessary, 

by June 26, 2013. Proposals should be emailed to EAS@dot.gov, with the title “Proposal 

to Provide EAS at [name of community(s)], with the appropriate docket(s). Questions 

regarding filings may be directed to Kevin Adams at 202-366-1047 or 

Kevin.Adams@dot.gov;

2. These Dockets will remain open until further Order of the Department; and

3. We will serve this Order on the service list for this Docket.

Persons entitled to petition the Department for review of this Order under the 

Department’s Regulations, 14 CFR Part 385.31, must file such petitions within seven (7) 

days after the date of service of this Order. 

This Order will be effective immediately, and the filing of a petition for review shall not 

preclude its effectiveness.

By: 

TODD M. HOMAN

Director

Office of Aviation Analysis

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

Nonstop Great Circle Miles to Chicago (ORD)

Eau Claire, EAU, 268

Hancock/Houghton, CMX 359

Muskegon, MKG 118

Paducah, PAH 343

Pellston, PLN, 293

Sault Ste. Marie, CIU, 341

Watertown, ART, 618

Nonstop Great Circle Miles to Detroit (DTW)

Eau Claire, EAU, 447

Hancock/Houghton, CMX 425

Muskegon, MKG 161

Paducah, PAH 458 

Pellston, PLN, 243

Sault Ste. Marie, CIU, 284

Watertown, ART, 391
Appendix B-1

Historical Passengers per T-100 Market Report for the Last Three Years

Eau Claire, WI (EAU) Hancock/Houghton, MI (CMX)

Year Month Origin Dest O&D Origin Dest O&D

2010 4 1,375 1,404 2,779 1,389 1,588 2,977

2010 5 1,384 1,467 2,851 1,356 1,374 2,730

2010 6 1,367 1,397 2,764 1,388 1,436 2,824

2010 7 1,683 1,778 3,461 1,980 2,224 4,204

2010 8 1,759 1,853 3,612 2,481 2,525 5,006

2010 9 1,688 1,656 3,344 1,759 1,684 3,443

2010 10 1,639 1,644 3,283 2,173 1,983 4,156

2010 11 1,566 1,513 3,079 1,882 1,777 3,659

2010 12 1,427 1,536 2,963 2,048 1,805 3,853

2011 1 1,466 1,323 2,789 1,603 1,702 3,305

2011 2 1,039 1,052 2,091 1,577 1,476 3,053

2011 3 1,540 1,546 3,086 2,046 1,875 3,921

YE 3-31-11 17,933 18,169 36,102 21,682 21,449 43,131

2011 4 1,323 1,352 2,675 1,697 1,859 3,556

2011 5 1,457 1,480 2,937 1,799 1,792 3,591

2011 6 1,546 1,430 2,976 1,628 1,742 3,370

2011 7 1,542 1,596 3,138 2,221 2,348 4,569

2011 8 1,468 1,439 2,907 2,357 2,465 4,822

2011 9 1,347 1,336 2,683 1,933 1,879 3,812

2011 10 1,463 1,498 2,961 2,127 1,942 4,069

2011 11 1,478 1,520 2,998 1,894 1,833 3,727

2011 12 1,690 1,724 3,414 2,002 1,835 3,837

2012 1 1,741 1,570 3,311 1,519 1,754 3,273

2012 2 1,795 1,597 3,392 1,816 1,671 3,487

2012 3 1,860 1,942 3,802 2,232 2,029 4,261

YE 3-31-12 18,710 18,484 37,194 23,225 23,149 46,374

2012 4 1,675 1,724 3,399 2,051 2,199 4,250

2012 5 1,766 1,706 3,472 2,079 2,094 4,173

2012 6 1,908 1,839 3,747 2,080 2,246 4,326

2012 7 1,759 1,600 3,359 2,580 2,499 5,079

2012 8 1,652 1,819 3,471 2,717 2,817 5,534

2012 9 1,625 1,536 3,161 2,065 2,029 4,094

2012 10 1,651 1,621 3,272 2,292 2,030 4,322

2012 11 1,534 1,485 3,019 2,003 1,920 3,923

2012 12 1,521 1,498 3,019 2,101 1,927 4,028

2013 1 1,651 1,443 3,094 1,685 1,783 3,468

2013 2 1,518 1,421 2,939 1,703 1,650 3,353

2013 3 1,772 1,884 3,656 2,085 1,704 3,789

YE 3-31-13 20,032 19,576 39,608 25,441 24,898 50,339
 Appendix B-2

Historical Passengers per T-100 Market Report for the Last Three Years

Muskegon, MI (MKG) Paducah, KY (PAH)

Year Month Origin Dest O&D Origin Dest O&D

2010 4 1,121 1,265 2,386 1,830 1,778 3,608

2010 5 831 959 1,790 1,999 1,932 3,931

2010 6 865 925 1,790 1,770 1,674 3,444

2010 7 1,147 1,301 2,448 1,713 1,736 3,449

2010 8 1,273 1,141 2,414 1,607 1,594 3,201

2010 9 1,181 1,105 2,286 1,877 1,838 3,715

2010 10 1,161 1,117 2,278 1,788 1,814 3,602

2010 11 981 996 1,977 1,667 1,667 3,334

2010 12 1,059 1,203 2,262 1,502 1,516 3,018

2011 1 872 640 1,512 1,309 1,260 2,569

2011 2 734 805 1,539 998 996 1,994

2011 3 991 925 1,916 1,186 1,225 2,411

YE 3-31-11 12,216 12,382 24,598 19,246 19,030 38,276

2011 4 798 922 1,720 1,293 1,386 2,679

2011 5 840 915 1,755 1,732 1,740 3,472

2011 6 959 1,165 2,124 1,812 1,688 3,500

2011 7 1,476 1,508 2,984 1,538 1,642 3,180

2011 8 1,559 1,377 2,936 1,543 1,619 3,162

2011 9 1,143 1,052 2,195 1,630 1,607 3,237

2011 10 1,343 1,289 2,632 1,623 1,759 3,382

2011 11 1,241 1,182 2,423 1,625 1,605 3,230

2011 12 1,504 1,638 3,142 1,496 1,524 3,020

2012 1 1,193 958 2,151 1,172 1,166 2,338

2012 2 1,369 1,267 2,636 1,165 1,185 2,350

2012 3 1,674 1,435 3,109 1,532 1,509 3,041

YE 3-31-12 15,099 14,708 29,807 18,161 18,430 36,591

2012 4 1,302 1,620 2,922 1,706 1,798 3,504

2012 5 1,506 1,536 3,042 1,928 1,834 3,762

2012 6 1,423 1,594 3,017 2,016 1,999 4,015

2012 7 1,673 1,621 3,294 1,878 1,968 3,846

2012 8 1,829 1,680 3,509 1,828 1,865 3,693

2012 9 1,428 1,300 2,728 1,944 1,911 3,855

2012 10 1,259 1,243 2,502 1,869 1,963 3,832

2012 11 1,153 1,133 2,286 1,751 1,729 3,480

2012 12 1,367 1,466 2,833 1,714 1,705 3,419

2013 1 1,220 1,044 2,264 1,433 1,376 2,809

2013 2 1,177 1,142 2,319 1,219 1,230 2,449

2013 3 1,599 1,397 2,996 1,478 1,537 3,015

YE 3-31-13 16,936 16,776 33,712 20,764 20,915 41,679
Appendix B-3

Historical Passengers per T-100 Market Report for the Last Three Years

 Pellston, MI (PLN) Sault Ste. Marie, MI (CIU)

Year Month Origin Dest O&D Origin Dest O&D

2010 4 1,072 1,365 2,437 1,085 1,227 2,312

2010 5 1,305 1,527 2,832 1,047 1,122 2,169

2010 6 2,073 2,466 4,539 1,031 1,187 2,218

2010 7 4,202 4,430 8,632 1,317 1,434 2,751

2010 8 4,597 4,011 8,608 1,482 1,279 2,761

2010 9 2,526 2,213 4,739 1,281 1,128 2,409

2010 10 2,074 1,889 3,963 1,330 1,290 2,620

2010 11 1,007 999 2,006 1,153 1,093 2,246

2010 12 962 1,148 2,110 1,247 1,238 2,485

2011 1 1,119 926 2,045 1,282 1,061 2,343

2011 2 889 805 1,694 1,094 1,017 2,111

2011 3 1,214 1,140 2,354 1,692 1,617 3,309

YE 3-31-11 23,040 22,919 45,959 15,041 14,693 29,734

2011 4 977 1,203 2,180 1,463 1,598 3,061

2011 5 1,481 1,754 3,235 1,405 1,539 2,944

2011 6 2,271 2,786 5,057 1,269 1,454 2,723

2011 7 4,121 4,177 8,298 1,896 2,032 3,928

2011 8 3,973 3,460 7,433 2,159 1,872 4,031

2011 9 2,343 2,097 4,440 1,553 1,451 3,004

2011 10 1,866 1,587 3,453 1,674 1,568 3,242

2011 11 1,283 1,276 2,559 1,557 1,529 3,086

2011 12 1,063 1,260 2,323 1,628 1,589 3,217

2012 1 1,067 837 1,904 1,365 1,297 2,662

2012 2 1,105 940 2,045 1,661 1,485 3,146

2012 3 1,184 1,193 2,377 1,893 1,866 3,759

YE 3-31-12 22,734 22,570 45,304 19,523 19,280 38,803

2012 4 689 954 1,643 1,516 1,729 3,245

2012 5 1,434 1,628 3,062 1,588 1,736 3,324

2012 6 2,361 3,012 5,373 1,353 1,625 2,978

2012 7 4,687 4,647 9,334 1,738 1,826 3,564

2012 8 4,481 4,173 8,654 2,109 1,978 4,087

2012 9 2,620 2,195 4,815 1,598 1,356 2,954

2012 10 2,227 1,942 4,169 1,618 1,530 3,148

2012 11 1,541 1,477 3,018 1,682 1,584 3,266

2012 12 1,298 1,450 2,748 1,659 1,632 3,291

2013 1 1,247 897 2,144 1,585 1,404 2,989

2013 2 1,241 1,088 2,329 1,850 1,528 3,378

2013 3 1,483 1,452 2,935 1,984 2,061 4,045

YE 3-31-13 25,309 24,915 50,224 20,280 19,989 40,269
Appendix B-4

Historical Passengers per T-100 Market Report for the Last Three Years

Watertown, New York (ART)

Year Month Origin Dest O&D

2010 4 197 238 435

2010 5 159 244 403

2010 6 184 249 433

2010 7 172 214 386

2010 8 180 250 430

2010 9 175 250 425

2010 10 160 243 403

2010 11 142 231 373

2010 12 249 275 524

2011 1 135 214 349

2011 2 158 228 386

2011 3 250 372 622

YE 3-31-11 2,161 3,008 5,169

2011 4 234 287 521

2011 5 252 347 599

2011 6 263 335 598

2011 7 336 384 720

2011 8 250 350 600

2011 9 228 306 534

2011 10 261 347 608

2011 11 639 697 1,336

2011 12 1,396 1,371 2,767

2012 1 978 1,073 2,051

2012 2 1,266 1,185 2,451

2012 3 1,380 1,481 2,861

YE 3-31-12 7,483 8,163 15,646

2012 4 1,394 1,539 2,933

2012 5 1,379 1,616 2,995

2012 6 1,298 1,485 2,783

2012 7 1,726 1,853 3,579

2012 8 1,833 1,955 3,788

2012 9 1,303 1,367 2,670

2012 10 1,550 1,614 3,164

2012 11 1,389 1,646 3,035

2012 12 1,471 1,546 3,017

2013 1 1,313 1,514 2,827

2013 2 1,192 1,315 2,507

2013 3 1,437 1,554 2,991

YE 3-31-13 17,285 19,004 36,289
Appendix C

Example of General Terms and Conditions for Essential Air Service

The carrier understands that it may forfeit its compensation for any flights that it does not 

operate in conformance with the terms and stipulations of the rate Order, including the 

service plans outlined in the Order and any other significant elements of the required 

service, without prior approval. The carrier understands that an aircraft take-off and 

landing at its scheduled destination constitutes a completed flight; absent an explanation 

supporting subsidy eligibility for a flight that has not been completed, such as certain 

weather cancellations, only completed flights are considered eligible for subsidy. In 

addition, if the carrier does not schedule or operate its flights in full conformance with the 

Order for a significant period, it may jeopardize its entire subsidy claim for the period in 

question. If the carrier contemplates any such changes beyond the scope of the Order

during the applicable period of these rates, it must first notify the Office of Aviation 

Analysis in writing and receive written approval from the Department to be ensured of 

full compensation. Should circumstances warrant, the Department may locate and select 

a replacement carrier to provide service on these routes. The carrier must complete all 

flights that can be safely operated; flights that overfly points for lack of traffic will not be 

compensated. In determining whether subsidy payment for a deviating flight should be 

adjusted or disallowed, the Department will consider the extent to which the goals of the 

program are met and the extent of access to the national air transportation system 

provided to the community.

If the Department unilaterally, either partially or completely, terminates or reduces 

payments for service or changes service requirements at a specific location provided for 

under this Order, then, at the end of the period for which the Department does make 

payments in the stipulated amounts or at the stipulated service levels, the carrier may 

cease to provide service to that specific location without regard to any requirement for 

notice of such cessation. Those adjustments in the levels of subsidy and/or service that 

are mutually agreed to in writing by the Department and carrier do not constitute a total 

or partial reduction or cessation of payment.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and 

Department regulations, as they may be amended from time to time. However, any such 

statutes, regulations, or amendments thereto shall not operate to controvert the foregoing 

paragraph.

Funds may not be available for performance under this solicitation beyond [DATE]. The 

Department’s obligation for performance under this solicitation beyond [DATE], is 

contingent upon the availability of funds from which payment for services can be made.

No legal liability on the part of the Government for any payment may arise for 

performance under this Order beyond [DATE], until funds are made available to the 

Department for performance. If funds are not made available for performance beyond 

[DATE], the carrier will receive notice in writing by the Department.

All claims for payment must be submitted within 60 days of the last day of service 

provided under this Order